Advantage India? Over 1 Million BPO Jobs at Stake if US Firms Say Goodbye to Philippines

NEW YORK (TIP): Economists and senators warned that Philippine President Rodrigo Duterte’s cheeky “goodbye” to the US was not the smartest move in a country where more than a million of service jobs are tied to many large US companies that operate business process outsourcing (BPO) there.

It would rather be a shot in the own foot to turn away from the US in economic terms, particularly in large urban areas like Manila and Cebu City where many young people rely on call center jobs, they argue.

Estimations are that about 1.2 million Filipinos would lose employment if US Companies pull out of the Philippines.

Many of them are huge multinationals, including IBM, Microsoft, Amazon, American Express, JP Morgan, Wells Fargo, Accenture and Citibank, just to quote a few, operating call centers with service hotlines and other back office processes.

The BPO industry is the second largest source of foreign income for the Philippines after overseas workers’ remittances, generating $22 billion in revenue in 2015.

By one estimate, 77 per cent of BPO services are done for US companies. According to earlier forecasts, by the end of this year the sector would employ 1.3 million people in the Philippines, according to the country’s IT and Business Process Association.

Apart from the BPO sector, the Philippine sugar industry could be another casualty of a divorce from the US, since the sugar quota to the US might also be adversely affected.